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9/5/2000

Preauthorization Ends at UnitedHealthcare

Katherine M. Bennett

Favoring a plan called "care coordination," UnitedHealthcare has stopped requiring physicians to obtain approval before proceeding with medical treatments, including certain drugs. 

The announcement last November by the Minneapolis-based company, a subsidiary of UnitedHealth Group, sparked speculation about an emerging trend among managed care companies. Aetna Inc.'s chairman was reported in the Nov. 22 Wall Street Journal to be considering a similar move away from preauthorizations. Princeton University economist Uwe Reinhardt, writing in the Nov. 17 Wall Street Journal, opined that managing health care remains a good idea but preauthorization and concurrent review of medical treatments "irritate patients, insult physicians and often cost more than they save." 

UnitedHealthcare said its care coordination, which uses seven clinical activities including pharmacy management, "helps doctors and patients reach the best decisions together with the support of [the company's] extensive knowledge and resources." Pilot testing took place in six of the company's markets in spring 1999. 

The company said it plans to use its database—with records on more than 14 million patients—to give physicians information about their decisions on treatments and how well those decisions match national trends. Those reports to physicians have been provided since 1997, according to the company's timeline. 

Connecticut-based managed care consultant Peter M. Penna, Pharm.D., said that stoppage of preauthorizations nicely complements UnitedHealthcare's three-tier system of copayments for prescriptions, which favors the use of formulary drugs. But if the company were to go further and eliminate the formulary, giving physicians free rein to "prescribe whatever they want," Penna said that UnitedHealthcare would "lose their shirt." 

In announcing the change to care coordination, UnitedHealthcare chief medical officer Archelle Georgiou said that the vast majority of reviews made by the company supported the clinical decisions proposed by physicians. The company spent millions of dollars each year confirming physicians' decisions but saved far less. Georgiou said the managed care company has turned its focus to promoting wellness and keeping patients "from falling through the cracks of the complex health care system.